Nio Looks Like a Bargain and Here's the Honest Answer on Whether to Buy

By Leo Sun – Apr 9, 2026 at 2:20PM ESTKey PointsNio’s deliveries are rising, and its vehicle margins are stabilizing.But it’s still burning cash and shouldering significant debt.Nio (NIO 4.15%), a leading electric vehicle maker in China, looks dirt cheap relative to its growth potential. Analysts expect its revenue to rise 47% in 2026 and 16% in 2027, yet it trades at less than one times next year's sales. They also expect its earnings before interest, taxes, depreciation, and amortization (EBITDA) to turn positive in 2026 and rise 35% in 2027. But based on its enterprise value, it trades at just 12 times next year's EBITDA. As of this writing, Nio's stock still trades slightly below its 2018 IPO price of $6.26 per ADR. Let's see why investors shunned Nio's stock -- and if it's a good contrarian investment. Image source: Nio. Why is Nio's stock trading at such low valuations? Nio produces a wide range of electric sedans and SUVs. It differentiates itself from its competitors with swappable batteries, which can be quickly swapped out at its battery-swapping stations as a faster alternative to conventional chargers. Its new Onvo and Firefly sub-brands sell cheaper SUVs and compact cars, respectively. It's also been expanding into Europe. Nio's annual vehicle deliveries surged from 43,728 in 2020 to 326,028 in 2025. During those five years, its revenue grew at a 40% CAGR, from 16.3 billion yuan to 87.5 billion yuan ($12.8 billion). However, its net loss widened from 5.6 billion yuan to 15.6 billion yuan ($2.3 billion) as it scaled up its business. In 2020, Nio nearly went bankrupt before a government-backed investor group invested $1 billion in the company. Its critics claimed that the investment was a bailout. ExpandNYSE: NIONioToday's Change(-4.15%) $-0.27Current Price$6.12Key Data PointsMarket Cap$13BDay's Range$6.02 - $6.6352wk Range$3.24 - $8.02Volume62MAvg Vol45MGross Margin13.66% Nio's steep losses drove it to take on more debt, which boosted its debt-to-equity ratio from 0.8 at the end of 2020 to 15.5 at the end of 2025. It still faces intense competition from other EV makers across China's crowded market. That pressure could limit its pricing power and ability to narrow its net losses and reduce its debt. The trade war between the U.S. and China is also exacerbating that pressure by driving investors away from smaller Chinese companies. Could Nio's stock be a turnaround play? Over the past year, Nio's vehicle deliveries accelerated as its vehicle margins expanded. That growth was fueled by the rising popularity of its namesake sedans and Onvo SUVs in China, the rollout of its new Firefly vehicles, and its ongoing expansion in Europe. It also turned profitable for the first time in the fourth quarter of 2025, but analysts don't expect it to stay in the black this year. Nio's stock will remain under pressure as long as it keeps burning cash, diluting its investors (its share count has risen nearly 60% in the past five years), and taking on more debt. But if you expect economies of scale to kick in as its deliveries keep rising, it could be worth nibbling on today. However, investors shouldn't expect its unloved stock to bounce back anytime soon.Read NextApr 9, 2026 •By Manali Pradhan, CFAShould You Buy Nio Stock Before June 2?Apr 7, 2026 •By Scott LevineWhy Nio Stock Accelerated 23.8% Higher in MarchApr 2, 2026 •By Josh Kohn-LindquistWhy Nio Stock Soared This WeekApr 1, 2026 •By Josh Kohn-LindquistStock Market Today, April 1: Nio Shares Jump After March Deliveries Surge 136% Year Over YearApr 1, 2026 •By Howard SmithWhy Did Nio Stock Rise Again Today?Mar 31, 2026 •By Howard SmithStock Market Today, March 31: Nio Jumps on Optimism for Strong Q1 Sales After First-Ever Quarterly ProfitAbout the AuthorLeo Sun is a contributing Motley Fool stock market analyst who has worked with the company since 2013, covering technology, consumer goods, industrial, and financial sectors. He became a self-made millionaire by age 40 through long-term investing, crediting lessons from Warren Buffett and Peter Lynch. Leo is a regular guest on CNBC Asia providing stock analysis on Chinese technology companies, including Tencent, Baidu, and Alibaba. He previously wrote for InvestorGuide and holds a bachelor’s degree in English from the University of Texas at Austin.TMFSunLionX@TMFSunLionStocks MentionedNioNYSE: NIO$6.12(-4.15%)-$0.27*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.